Effort continues to secure financing for hotel at convention center

Wednesday

Jul 31, 2013 at 4:27 PM

city council voted unanimously to give Harmony an additional 90 days to get their financing in order

By Julian MarchJulian.March@StarNewsOnline.com

The developers angling to build an upscale hotel next to the Wilmington Convention Center are still working on financing for the $33.6 million project.On Wednesday, an agreement between the city and Virginia developers Harmony Hospitality expired, though Mayor Bill Saffo expressed support that the project will come to fruition.On May 7, the city council voted unanimously to give Harmony an additional 90 days to get their financing in order. It was their third request for an extension to a development agreement first launched in February 2012. Harmony representatives have blamed the delays on waiting for paperwork to wind through the federal government. The paperwork is for the Immigrant Investor Program, known as EB-5, which is administered by the U.S. Citizenship and Immigration Services. The program allows foreign investors a fast track to obtain a green card, which allows non-citizens permanent residency.Harmony filed paperwork in June of 2012, but still hasn't heard back. "We know you're disappointed," said Harmony's Brooks Johnson, at the May meeting. "We're disappointed."Yet Johnson also said the developers are looking at other financing alternatives so they can keep the project moving forward. On Tuesday, Johnson said Harmony is still working on its financial Plan B, but that the backup plan may not even involve the EB-5 financing. "We may just go ahead and finance the whole thing," Johnson said.As of Tuesday, Harmony had still not received word about the EB-5 program, although Johnson said the application had moved up in the pile. Separately from the financing, Johnson said they have made progress, including having the project appear before the city's Technical Review Committee this month."We've been doing a lot of work," he said. In March, Hilton Hotels signed off on Harmony's application to build a $33.6 million, 186-room Embassy Suites on the site, sandwiched between the convention center, the Cape Fear River and the Wilmington Chamber of Commerce. The 163,000-square foot hotel would also include a full-service restaurant on its second floor and 6,600 square feet of meeting space.Saffo, who recently announced he is running for re-election, said he was motivated by a desire to see projects through, including a hotel next to the convention center. (He is running unopposed.)On Wednesday, the mayor said Harmony has made progress despite financing delays. In May, when the council granted an extension, it added two additional conditions: that Harmony make substantial progress on completing an agreement to purchase land from the city as well as finalizing easements for the hotel. Johnson said Harmony has a draft easements agreement from the Chamber of Commerce and has made progress on the purchasing agreement.Although the city’s agreement with Harmony expired Wednesday, it was planned the project would be on the agenda for the council’s regular meeting on Aug. 6. Instead, the city council will likely consider the item at the following meeting on Aug. 20, said Malissa Talbert, a city spokeswoman. Talbert said the delay will allow the city and Harmony to complete remaining details in the land purchase agreement and allow the full council to be present for the agenda item.“I think this is an important enough issue that the entire council needs to be there,” Saffo said, adding that Mayor Pro Tem Earl Sheridan will be absent Aug. 6 and Councilwoman Margaret Haynes may be also unable to attend.But the continuance would also give Harmony two additional weeks to get word about the EB-5 program before formally presenting a back-up plan. "We would hope that we would hear back from the federal government at any moment," Saffo said.Still, even if it doesn't, the mayor wants to avoid another delay. "I would hope that we would have a plan in place, ready to go, ready to close," he said.